Prepare for another half-point interest rate rise in Chile next week. That appears to be the message from today’s report of 0.8 per cent rise in inflation in March. While widely expected, it was still the highest monthly rise since September 2009. On a 12-month basis, inflation was 3.4 per cent and the national statistics institute noted that prices had risen 1.3 per cent since the start of the year.

José De Gregorio, the central bank president, wasted no time in commenting on the worrisome data. “Inflation is a problem,” he said. “A few months ago we predicted we would end the year with 3.3 per cent inflation but now our forecast is that we will end the year with 4.3 per cent,” he said. Continue reading »